In this guide, we’ll tell you what you need to know about the annuity buying process – how it works, how it varies by annuity type and fund type, and what to expect once you decide you’re ready to purchase an annuity.

For more detail on the annuity buying process or to have a copy of this guide to read at your leisure, download the free Annuity Buying Guide PDF.

The 7 Major Steps in the Process

1. You submit the information for your Application using our simple online form, or we can collect the information over the phone if you prefer. If the insurer allows electronic signature, we’ll collect that from you. Otherwise, we’ll send you a hard copy of the paperwork to sign via FedEx overnight. Once you’ve signed the application, you’ll use the prepaid return label we provide to send one copy back to us and one copy to the insurer (or to Financial Independence Group, our insurance processing partner in North Carolina).

2. Your completed application (which may include an illustration and transfer request paperwork, but more on this later) must be accepted by the insurer In Good Order.

3. The insurer conducts a review of the information provided by you in order to ensure the annuity product’s Suitability for your particular situation.

4. Next, the Transfer Request is submitted to the transferring entity. Depending on your source of funds, this could be your bank, your brokerage account, your 401(k), or the insurer that holds your existing annuity. If you decide to fund your policy with a check, there won’t be any Transfer Request.

5. Once funds are received, the Policy is Issued.

6. As the agent, we usually receive the policy first, confirm its accuracy, then send it to you, at which time Policy Receipt has occurred.

7. By law, you have at least 10 days as part of the Free Look Period from the time of Policy Receipt to reject the policy. Free Look Periods can vary by state and insurer, but are never shorter than 10 days.

How the Process Varies by Annuity Type

The process varies based on two main variables: the type of annuity you’re buying and the source of funds.

There are several types of annuities, but some are so complicated we don’t offer them. We focus on fixed annuities (guaranteed rate of return for a predetermined period of time) and income annuities (a predetermined amount of monthly income for life, starting either now or in the future).

• Income annuity applications are submitted with an illustration that locks in your income payout rate while your application is being processed. This is known as Rate Lock. In most cases, the insurer will automatically grant you a higher rate if the rate goes up during the period between the application being accepted In Good Order and the policy issuing. We also regularly run updated quotes during this period to ensure you get the highest possible pricing.
• Fixed annuities do not typically receive Rate Lock — you simply get the prevailing rate at the time the policy is issued.

Detailed Timeline

The process varies by insurer, by policy type, by fund type, and for idiosyncratic reasons. This timeline is illustrative in nature and your actual buying process may vary slightly.

Download the Annuity Buying Guide

We’ve given you a lot to read! It might be easier to download the PDF version, print it out, and read it at your leisure. If this interests you, simply click the button to access the free guide.

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